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A decline in US coal production for week ending 9 May

Published by
World Coal,

T.L. Headley, West Virginia Coal Association.

According to the latest report from the US Energy Information Agency (EIA) and the National Mining Association, coal production in the US has declined by 2.86 million short t (15.1%) for the week ending 9 May, compared to the same time last year. Production for the week stood at 16.03 million short t, decreasing 2.86 million short t from 18.89 million short t for the same week in 2014.

Cumulative production for the year-to-date saw a sharp decrease, finishing at 331.75 million short t compared to 352.76 million short t last year – a decline of 21.01 million short t or 6%. Production for the previous 52 weeks also trended lower – finishing at 976.19 million short t compared to 986.73 million short t for the same period ending in 2014 (-1.1%).

The number of railcar loadings were also down sharply, finishing the week down 16.2% from the same period last year. Rail car loadings are also down sharply year-to-date – off 5.6% from the same period in 2014.

Electric output decreased slightly by 0.6% for the week ending May 9 – and also down slightly (-0.3%) year-to-date. Steel output continued its decline, down 10.5% for the week, totalling 1.67 million short t produced, with a capacity utilisation factor of 70.4% and it continues its slide year-to-date — down 7.1% to 31.51 million short t produced compared to 33.93 million short t for the same period last year. The continuing decline in steel production is a strong indicator of the status of the broader economy and the continued declines seen in steel production point to declines in durable goods orders and a softening of the national economy in the near-term.

In terms of regional coal production, all three major basins reported sharp declines in production.? The Appalachian Basin was down for the week (-8%) to 4.39 million short t from 4.76 million short t the previous week. Interior Basin production was also down for the week (-8%), finishing at 3.02 million short t compared to 3.29 million short t last week. Western production was down sharply this week (-8%), totalling 8.62 million short t from 9.33 million short t last week. All three basins continue to report significant declines in production year-to-date, with Appalachia down 7.3%, the Interior Basin off 5.5% and the Western Basin down 5.4%.

Looking at the previous 52 weeks, Appalachian and Western Basin production results continued to be down for the period ending 2 May, declining 3.1% and 0.6% respectively. Meanwhile production in the Interior Basin was up 0.5% for the period — increasing slightly to 184.59 million short t from 183.65 million short t for the same period in 2014. Appalachian production fell for the period to 260.34 million short t from 268.53 million short t. Meanwhile, Western production is down to 531.25 million short t from 534.54 million short t in 2014.

According to the West Virginia Office of Miners’ Health, Safety and Training, coal production in the state for 2015 (reported through 7 May 2015) stands at 30.38 million t year-to-date – 24.23 million short t produced underground and 6.15 million short t produced through surface operations. The number of mines reporting production in March increased to 125. The number of mines reporting production is subject to change as additional reports are submitted. The number of active miners working saw a decline, coming in at 15 624 compared to 15 656 last week. Underground operations had 12 715 direct mining employees, while surface operations finished up at 2 909 employees. Again, these numbers are expected to change with additional reports.

Coal production in Kentucky for the week ending 9 May dropped to 1.24 million short t compared to 1.53 million short t for the same week in 2014, with the state seeing significant declines in both its eastern and western fields.

Meanwhile, coal production in Kentucky is off by 5.3% for the previous 52 weeks, with western Kentucky fields reporting production declines of 5.4% and eastern Kentucky operations reporting declines of 5.2%.

Wyoming coal production was also down considerably for the week compared to 2014, coming in at 6.22 million short t, off from 7.26 million short t – a decline of 14.4%. For the previous 52 weeks, Wyoming production is down 1.3%. Illinois production also finished sharply lower for the week, coming in at 1.24 million short t compared to 1.53 million short t for the same period in 2014. Indiana production is down as well, coming in at 617 000 short t compared to 741 000 short t for the week in 2014. Pennsylvania production for the week is also down sharply, to 1.09 million short t versus 1.20 million short t for the same week in 2014, but is up 8.1% for the previous 52 weeks. Ohio production is off as well — dropping to 466 000 short t compared to 519 000 short t in 2014. Virginia production was also off this week, declining to 232 000 short t compared to 305 000 short t for the same week in 2014. Virginia production for the previous 52 weeks is off by 12%.

Coal prices on the spot market remained steady this week. Central Appalachian coal held at US$52.85/short t or US$2.11/ million Btu. Northern Appalachian coal held at US$60.90/short t or US$2.34/million Btu. Illinois Basin coal prices were firm at US$40.45/short t or US$1.73/million Btu, while Powder River Basin coal remained steady at US$11.55/short t or US$0.66/million Btu, and Uinta Basin coal prices were unchanged at US$39.30/short t or US$1.70/million Btu.

Natural gas prices on the Henry Hub finished the week up 13 cents to US$2.85/million Btu. Natural gas producers again reported an increase in their stored reserves – up 76 billion ft3 compared to the previous week, for a total of 1.7 trillion ft3 in storage. This week’s working natural gas rotary rig count dropped to 894, from 905 last week and 1855 a year ago. This number includes rigs working in both oil and gas plays.

Written by T.L. Headley. Edited from various sources by Harleigh Hobbs. This article first appeared in the WV Coal Seam blog of the West Virginia Coal Association.

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